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Comment by drewcrawford | Hacker News Reader

I think there is a great meta-question in here, about business models for digital data and software.

Here you have a great case study, about an organization that tried to do a volunteer model, and it didn't work. Then they pivoted to a commercial model, but fundamentally they still believe in a free tier. But they have to cripple that free tier pretty thoroughly, and even still people abuse it.

I have a product I'm working on, that some people are apparently willing to spend lots of money on. Ideally I would have some kind of low tier, so that people without lots of money would be able to use it too. But I can't figure out a way to segment the product so that everybody pays what they can afford without bad apples abusing the low tier and ruining it for everybody. The result is that I may end up only selling it to customers with deep pockets, even though the product is much more broadly applicable.

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They made the process of paying for the software a laborious pain in the ass. They are desperately trying to extract money from those who can pay, which sadly drives away those who can pay but don't want an involved process.

I have worked at lots of companies where I had a monthly budget of 10k+ that I could spend on whatever I wanted, but if I wanted any sort of complex deal (can't just put on CC with a line item) -- had to bring in legal and other groups -- instantly killed any interest.

"Licensing is based on the data needed (e.g. all of it vs subset), how it is used (e.g. internal only, external, product integration), etc."

What a goddamn horror show. I simply want a product, I want to pay for it, and I want to use it. Turning on Dropbox for Business was a decision made in about 5 minutes... "You all like it, already using it, awesome! I will get team setup." -- 5 minute later I had given Dropbox $3800.

I really think they are getting in their own way for no benefit. They have created a very high barrier to EVEN HAVING A DISCUSSION about buying the product. So, if I don't know exactly how will use it -- I can't purchase it. Stupidity.

Publishes data in public. Can't get people to pay for it. Blames people for theft. The real thieves are the ones separating people from their wallets over data that is available public and censuring it to those who won't pay.

Perhaps it won't come as a surprise but I've been toying with this question for a couple of decades now. Specifically what are the economics of information? In the 'goods' economy there are some interesting mechanisms that inform the question of value, these include but are not limited to, the cost to acquire materials, develop expertise in manufacturing, and managing the supply lines between raw material to finished good. Accountants will talk about the "Cost of goods sold" as a grouping function for these costs. In the 'information' economy the manufacturing part it pretty trivial, you just replicate copies, but the assembling part can be quite difficult. This leads to an interesting inversion where it can cost a lot to assemble something and nothing to 'manufacture' it. And that doesn't even begin to touch on what it is about information that makes it valuable in the first place.

What is the difference in value between a CD with the latest release of Ubuntu burned on it, and the download? download and a bootable Flash drive?

There is a great experiment you can run which goes like this; At one end of an athletic field, place a chess board with a queen on it on one of the squares. At the other end of the field have a table where people can get a quest. Offer to pay a person $5 if they will walk to the end of the field, note where the queen is, and come back and tell the quest giver. At the mid point of the field set up an information seller. They offer to sell you the location of the queen for anywhere between 20 and 80% of the reward price.

This simple experiment lets you see all sort of mechanisms in play that control information value. On the one hand you can see the range of values people apply to their own time (acquisition cost), their willingness to retain value (do they then go back mid-queue at the sign up table and start offering to sell the information for some fraction of the price to anyone?) At what threshold to people start trying to break the rules (a notion that is similar to price inelasticity but has a component like the 'black market demand').

Interesting questions to be sure.

perfect price discrimination is hard.

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